In preparation for its merger with Dow, DuPont Co. will cut about 28 percent, or 1,700 members, of its workforce in its home state of Delaware in early 2016, the chemical company revealed Tuesday.
"The effect in Delaware will be significant, reflecting the urgent need to restructure our cost base and, as part of that effort, reduce our corporate overhead costs so that we can remain competitive," DuPont Chief Executive Officer Ed Breen said in a letter to employees, according to Bloomberg.
News of the layoffs comes as DuPont continues to work towards its merger of equals with Dow, which was annouced earlier this month. The two companies intend to merge into one company before splitting into three independent entities focusing on material science, agriculture and specialty products.
On Dec.11, the same day the merger was announced, DuPont announced a restructuring plan aimed at saving $700 million in costs and reduce its work force of 63,000 by 10 percent but didn't specify which locations would see the job cuts, according to the Detroit Free Press.
Breen said the company would have prefered not to break the news amid the holiday season but was required to by law to notify the state of the job cuts by the end of the year.
"Especially given that we are in the middle of the holidays, we would have preferred to wait until individual notifications were complete before reporting the full local impact," Breen wrote in the memo. "... I wanted you to hear the difficult news - directly from me ..."
Delaware governor Jack Markell said the announcement of the job cuts is "deeply disappointing."
"DuPont's number one asset is its people, and the innovations that the company has produced during its storied history are a testament to the quality of those people. For those affected by today's announcement, they should know that the State will do all that it can in the coming months to assist them as they evaluate new opportunities," Markell said in a statement.
The state "will continue to urge DuPont and Dow to see the value of locating other businesses here in Delaware, where they have grown and succeeded in the past," he continued.
If it goes forward, the Dow-DuPont deal would be among the largest in a year that has seen an unprecedented amount of major mergers and acquisitions. The value of the buyouts, both proposed and completed this year, has reached a high of $5.03 trillion, thanks in part to extremely low interest rates.
DuPont rose 1.7 percent to close at $67.57 while Dow rose 1.1 percent to $52.79.
